Olympia Update No. 4 ● March
30, 2009
Senate
2009-2011 Operating Budget
From: Larry Ganders, Assistant to the President
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Version
Click Here for House and Senate budget bills
Senate proposes
20 percent budget cut
Washington State University will lose 20 percent of its current state funding
base under a proposed 2009-2011 budget announced today by Senate leadership and
under consideration by the Senate Ways and Means Committee.
“We at WSU recognize that the Legislature is dealing with the impact of an
economic crisis that is unparalleled since the Great Depression,” WSU President
Elson Floyd said today. “At the same time, we strongly believe that higher
education must be a central part of the solution to this crisis. Budget cuts of
the magnitude of those in the Senate’s budget would have a dramatic impact on
WSU. Layoffs and reductions in enrollment and important public service programs
would be unavoidable,” he said.
Pres. Floyd and Provost Warwick Bayly have scheduled two meetings tomorrow with
the university community to discuss the budget situation. Also tomorrow, the
state House of Representatives leadership is expected to propose its own version
of the state budget to be considered by the House Ways and Means Committees.
The Senate’s proposed 20 percent budget cut for WSU announced today compares
with a 12 percent WSU reduction announced by the governor last December.
The proposed WSU cut by the Senate totals $104.3 million for
the biennium compared to $64 million by the governor. Senate Majority
Lisa Brown, D-Spokane, said a lot has changed since December as the state’s $6
billion budget shortfall swelled to $9 billion. The recession “ravaged the
bottom line of businesses and households,” and decreased state revenue
collections substantially, she said.
“This is a difficult day for legislators,” Brown said. She said the higher
education decisions in the budget were particularly difficult for her.
“As a college professor, I came here
believing in the power of colleges and universities to transform peoples’
lives,” said Brown, a professor at Gonzaga University.
Unlike the governor, the Senate had more than $800 million in one-time federal
stimulus dollars to offset state cuts in education, and it allocated $15.8
million to WSU next year to deal with the cuts. Those one-time dollars
effectively lower the biennial cut from 20 percent to 17.1 percent.
But federal funds will go away in just one year and WSU would return to a deeper
cut level.
7 percent tuition increase.
Like the governor, the Senate has authorized the universities to raise
undergraduate resident tuition 7 percent this fall and 7 percent the following
year. If WSU’s Board of Regents raised tuition to the maximum level, tuition
funds would offset some of the lost state funding. Under this scenario, the
Senate budget would still leave WSU with one of the deepest cuts in history, a
12 percent net reduction. Senate leaders had been reportedly considering tuition
increases of up 14 percent per year and even refer to the 14 percent scenario in
budget language. The Senate language indicates that federal stimulus funding
provided the ability to lower the increase to a maximum of 7 percent.
Senate leaders said there were difficult decisions made throughout budget
(Senate Bill 5600) including no pay increases for any
state employees, higher health insurance copayments, deep personnel and
administrative cuts through government, 42 percent cuts to the basic health
plan, and closing the McNeill Island Penitentiary.
For every $1 cut by the governor, the Senate said it needs to cut $1.60. Unsure
of whether the economy has bottomed out, Brown indicated the Senate will leave
an $850 million reserve.
Retirement Incentive Proviso.
A proposal by WSU to offer its faculty retirement incentive
package to classified staff was not included in the Senate budget. The decision
was made late in budget-writing process to include language that leaves in place
current guidelines by the state Office of Financial Management. WSU has offered
$18,000 in a tax free account for any faculty member or exempt staff member on
the WSU Benefits Plan to retire this year. OFM guidelines for classified staff
and about 20 percent of WSU’s exempt staff that are in the state PERS retirement
system require that a person must be eligible for normal retirement for at least
12 months to get incentive benefits. The Senate language also does not allow for
deposit in a tax-exempt medical savings account. WSU will continue to urge the
Legislature and OFM to change this policy.
Student Financial Aid Maintained
The proposed Senate budget maintains student financial aid for families at 70
percent of median family income. In a rare place where a higher education
appropriation was actually increased instead of cut, the
Senate budget provided $32.7 million in
additional appropriations to maintain the state need grant program. Senate
leaders said it should fully offset the 7-percent tuition increases for
low-income students at the public colleges and universities.
Performance Agreements
The Senate budget keeps alive the concept of performance agreements, contracts
between institutions like WSU and the state that will identify specific
measurable outcomes for specific funding. The effort, originally scheduled for
this biennium, became bogged down when state’s revenues fell.
Flexibility
The Senate budget contains language that direct WSU to consider various budget
reduction strategies but does not dictate many specifics. Budget notes limit the
cut to instructional areas to 20 percent, well within the scenarios the
university has been exploring.
Building Maintenance
The Senate budget provide maintenance and operations funding for the proposed
Global Animal Health Building, Phase I. This building is made possible by a $25
million gift from the Gates Foundation but could be built immediately if $10
million in state construction funding is provided by the state capital budgets.
What’s Next
Once the House budget is released Tuesday, negotiations will continue between
the House and Senate to resolve their differences on the operating budget.
Capital construction budgets by the House and Senate are expected to be
announced late this week. The discussion over the budgets will continue to
involve the governor who will have to agree to sign the final budgets into law.
The session is scheduled to adjourn April 26.
For the status of bills
affecting WSU -
http://www.olympia.wsu.edu/Status/
Olympia Update is produced for persons interested in state
government developments affecting Washington State University. For more
information, go to
www.olympia.wsu.edu.
Contact: Larry Ganders, Assistant to the President, 360-956-2165. From WSU
campuses, dial 8-2165. If you wish to subscribe to Olympia Update directly by
email go to
www.olympia.wsu.edu/Update.aspx
